Kilmartin objects to OHIC approval of Blue Cross rate increase request

R.I. ATTORNEY GENERAL Peter F. Kilmartin has called on R.I. Health Insurance Commissioner Dr. Kathleen C. Hittner to more fully explain her decision regarding a rate increase request by Blue Cross & Blue Shield of Rhode Island, saying that her decision lacked transparency.  / PBN FILE PHOTO/TRACY JENKINS
R.I. ATTORNEY GENERAL Peter F. Kilmartin has called on R.I. Health Insurance Commissioner Dr. Kathleen C. Hittner to more fully explain her decision regarding a rate increase request by Blue Cross & Blue Shield of Rhode Island, saying that her decision lacked transparency. / PBN FILE PHOTO/TRACY JENKINS

(Updated 3:34 p.m.and 5:04 p.m.) PROVIDENCE – Attorney General Peter F. Kilmartin last week called on state Health Insurance Commissioner Dr. Kathleen C. Hittner to reconsider a decision to approve a 10 percent health insurance rate hike for certain Blue Cross & Blue Shield plans, saying her decision to do so lacked transparency and reason.
The attorney general is also concerned about “closed-door communications” between Hittner and Charles DeWeese, actuary for the Office of Health Insurance Commissioner.
Hittner on Aug. 3 approved a Blue Cross & Blue Shield of Rhode Island request to increase rates 10 percent for its Direct Pay business on the individual market comprising those who pay for individual coverage without the help of employers, excluding those insured on the Rhode Island state health benefits exchange who qualify for Medicaid subsidies.
The increase is slated to go into effect on Jan. 1, but not without pushback from the attorney general.
Kilmartin, after reviewing Hittner’s order, filed a motion for reconsideration, saying her order didn’t comply with state law that mandates all agency orders contain “concise and explicit statement of the underlying facts supporting the findings of fact,” according to a release from his office.
“The order issued by the health insurance commissioner did not provide any reasoning or support for her findings of fact, making it impossible for anyone to understand her rationale,” Kilmartin said in a statement. “My priority is to protect the interests of the ratepayers and it is imperative that all available information be made public so that the process be transparent for all.”
Sarah Nguyen, OHIC principal policy associate, on Tuesday afternoon said Hittner would not comment on Kilmartin’s motion because of its pending status.
Blue Cross first submitted its 2016 insurance rate increase request to OHIC in May, asking for a 17.9 percent rise in its individual market, which Hittner reduced to 10 percent prior to approval. Other specifics pertaining to the approval were not immediately available midday Tuesday.
Blue Cross in a letter to ratepayers earlier this year said key drivers for the rate increase were due to the continued rise in the total cost of health care in Rhode Island and the phase out of the Temporary Reinsurance program under the Patient Protection and Affordable Care Act. Last year, OHIC approved a 4.5 percent increase for Blue Cross in its individual market with a base rate of $330.09 (Blue Cross had requested $341.68).
The requested rate increase for 2016 was initially debated during the first week of July. Hittner’s appointed hearing officer, Providence attorney Raymond Marcaccio, held public hearings and subsequently produced a 35-page report with recommendations on how OHIC should handle the proposed new rates, according to Kilmartin’s motion.
Marcaccio recommended OHIC allow Blue Cross to retain a $6 million surplus from its Direct Pay business and add it to its capital reserves, but said the insurer should use funds left over from two ACA programs, the Federal Transitional Reinsurance and the Federal Risk Adjustment programs, totaling about $5.7 million, as a dollar-for-dollar adjustment to its 2016 Direct Pay rates.
Hittner rejected Marcaccio’s recommendation and instead ordered Blue Cross to retain the $5.7 million for its capital reserves.
Kilmartin lauded Marcaccio’s rationale in the filing, saying it left “no question as to what factors [Marcaccio] considered in reaching his conclusion.”
But he rejects Hittner’s order for approval saying it was “bare-bones,” making it “impossible for the Attorney General and the public to know and understand the basis for the commissioner’s decision,” according to the filing.
The attorney general also raised concerns surrounding communications that happened between Hittner and DeWeese, which “directly related to the Blue Cross Direct Pay filing and occurred after the hearing was completed but before [Hittner] issued her order,” according to Kilmartin.
“[Hittner] requested that Mr. DeWeese calculate what the rate increase would be if [Marcaccio’s] recommendations were adopted,” according to the filing. “Mr. DeWeese complied with her request and the submission of an additional report not already in evidence constitute impermissible ex-parte communications in violation of OHIC rules and regulations and [Rhode Island general laws].”
Hittner will now decide how she wants to respond, according to attorney general spokeswoman Emily Martineau, as the motion is filed for consideration in her office.
But Kilmartin reserves the right to appeal the decision in Superior Court under the Administrative Procedures Act, if his office “decides to go that route,” Martineau added.
Kilmartin’s motion for reconsideration was filed late in the day Friday.

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